LONDON Oct 12 Tesco, Britain's biggest
grocery chain, has pulled dozens of Unilever products from its
website after a disagreement over prices in the wake of a partly
Brexit-driven decline in the British pound.
The dispute between two of Britain's best-known companies
shows how the Brexit decision has exacerbated tensions between
suppliers and retailers, who are battling for profits as
consumers are increasingly savvy about shopping.
Unilever has been trying to raise prices across a wide
range of goods by about 10 percent to offset the higher cost of
imported commodities, Britain's Guardian newspaper reported.
As of Wednesday evening, Unilever products including Marmite
spread, Ben & Jerry's ice cream, Lynx body spray and PG tips tea
were unavailable on the retailer's website, but the shortage had
not yet affected stores, a Tesco spokesman said.
"We are currently experiencing availability issues on a
number of Unilever products. We always work to ensure customers
get the best possible prices and we hope to have this issue
resolved soon," he said.
A spokesman for Unilever, which will report financial
results on Thursday, declined to comment.
Last week, Tesco boss Dave Lewis, a former Unilever
executive, hailed a transformed relationship with suppliers as a
major factor in the grocer reporting a 60 percent rise in first
half profit and the setting of tougher profitability targets.
But he indicated it was not a given that suppliers should be
able to recoup the cost of the falling pound as they had not
always passed on benefits when sterling was much stronger.
Most analysts and economists believe that sterling's slump
will lead to higher grocery prices, following years of deflation
due to a price war between the big chains.
However, last month Mike Coupe, CEO of Sainsbury's,
Britain's No. 2 supermarket, said the currency's depreciation
would not necessarily lead to higher grocery prices, as it could
be offset by lower commodities prices and stiff competition.
Tesco last year pulled a range of Coca-Cola soft drinks,
including Schweppes, after what industry publication The Grocer
said was a row over pricing.
Since Britain's shock decision in June to leave the European
Union, its currency has plunged almost 18 percent against the
U.S. dollar. Three-quarters of British food manufacturers said
they have seen an increase in the price of imported ingredients,
according to a survey published earlier on Wednesday.
The average price for a basket of 35 commonly bought goods
cost 83.19 pounds ($103.45) in September, according to price
tracker mySupermarket.co.uk, up 57 pence from May, the month
before the vote.
($1 = 0.8042 pounds)
(Reporting by Martinne Geller and James Davey in London;
editing by Ralph Boulton)